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 Replies: 21 / Views: 2,750 |
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Bedrock of the Community
United States
20753 Posts |
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If those retailers have a location in your state you're most likely getting taxed on a purchase. They are just trying to make MONEY you know. Not sure when this all started but somewhere along the line they started with the sales taxes on those catalogs you get in the mail if you live in the same State they are based. It was on the news not long ago that Amazon is going to start pulling out of States that do this though. Not sure how that would work if all States started doing this. Not sure how this works with coins at all. At a coin store around me they mostly charge sales taxes. At coin shows I have never paid any taxes. No taxes at flea markets regardless of the item being new or used. With a coin I always wondered if the Government imposed sales taxes everywhere on coins, imagine if you had a coin that was originally a $0.01 coin, cent or penny, and it sold for $1.00. In Illinois you would pay 10.25% sales taxes. Then it is resold several more times for $1.00, eventually you would be paying more in taxes than the coin itself could ever be worth.  |
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Valued Member
United States
327 Posts |
The beauty of coin buying and selling (face to face, anyway) is that it's an all cash business.
Take that for what it's worth.
Somewhere in our past, the government decided it would give itself the right to poke it's nose into every single solitary transaction where money is exchanged for goods, no matter how small or inconsequential.
A lot of people dislike this, and resist it at every opportunity.
Most of the money I make (when I do, but I seem to be following the "buy high, sell low" business model) gets plowed right back into more coins, supplies, etc for the hobby, so it's not like I'm making a living here.
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Pillar of the Community
 United States
2448 Posts |
 I think we all have that business model from time to time. |
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Valued Member
United States
341 Posts |
W1a9c8k5 are any of you claiming these sales as or are you a business? How would the gov know your selling coins other than an ebay account? |
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Valued Member
United States
341 Posts |
If people have to claim there profits then don't they have the ability not to pay tax on an item if it is for resale?
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Bedrock of the Community
United States
20753 Posts |
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The beauty of coin buying and selling (face to face, anyway) is that it's an all cash business.
Not always. Almost all coin stores I know of will take credit cards and/or a check. Those are tracable. One coin shop told me if I use a credit card or check, there is an additional charge for that and they then must charge sales taxes. One coin shop that also sells at coin shows always asks if you want a receipt. And if you don't use cash, they insist you need a receipt. It is obvious though that many coin shops do have to keep records of all or most sales due to other tax purposes. Difficult to own a buisness and have no sales at all, maybe. I've always wondered how a situation would work if all was done by the book. You start with a $1 purchase price for a coin. You pay the sales tax on that $1. Now you turn around and sell it for $2. Is the sales tax now on the $2 or is it only on the $1 profit? Now you sell it for $10 so already people have paid sales taxes twice on that same item so when does it all stop? |
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Pillar of the Community
Canada
1733 Posts |
It doesn't stop, every time it's sold tax is collected again. In many locales you are supposed to voluntarily report new or used items you purchased privately or out of state and voluntarily submit any tax owing.
Governments are so huge now, they need a constant influx of cash to run that exceeds anything we could have imagined 50 years ago.
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Moderator
 United States
189185 Posts |
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Almost all coin stores I know of will take credit cards and/or a check. I have always paid cash for my coins and for good reason. Not because I do not want to be tracked or taxed, but because I do not want to see the bill after buying all the key dates I need! I always pay my full balance each month, which would be impossible after that! |
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Bedrock of the Community
United States
17884 Posts |
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If people have to claim there profits then don't they have the ability not to pay tax on an item if it is for resale? They don't have to pay sales tax on an item if they have a resale/sales tax license. But income tax on the profits is still due. That does for either a business or a hobbiest. A business though can deduct expenses (A hobbiest normally can't.) and they can have a net loss that they can carry over to subsequent years to offset profits. A hobbiest can use losses to offset profits but can not show a net loss. Quote:
You start with a $1 purchase price for a coin. You pay the sales tax on that $1. Now you turn around and sell it for $2. Is the sales tax now on the $2 or is it only on the $1 profit? The sales tax would be on the full $2 sale price, and income tax due on the $1 profit. Oh and if you hold the coins for over a year then the profits are taxed as long term capital gains at the collectibles level of 28% Edited by Conder101
03/24/2011 7:20 pm
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Bedrock of the Community
United States
20753 Posts |
Quote:
Governments are so huge now, they need a constant influx of cash to run that exceeds anything we could have imagined 50 years ago.
That one made me laugh. I always think of the info that our own State government publicized about how almost 90% or more of the money taken in on tolls on the toll roads here in Illinois go to pay for the people and machines taking in the money. HUH? Quote:
The sales tax would be on the full $2 sale price, and income tax due on the $1 profit.
Oh and if you hold the coins for over a year then the profits are taxed as long term capital gains at the collectibles level of 28% Conder101, you should be an accountant, but not mine. You know to much. I'll never tell how much I paid for a coin to a tax man. |
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Bedrock of the Community
United States
17884 Posts |
In which case they will use the face value of the coin as the basis for determining the taxable gain.
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Pillar of the Community
United States
880 Posts |
Wow - this makes me wish I was more educated lol! Too bad I just like collecting coins and don't care about all these tax things. I second paying cash.
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Moderator
United States
189185 Posts |
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Too bad I just like collecting coins and don't care about all these tax things. I agree. Another reason why I do not ever want to sell my coins. |
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Bedrock of the Community
United States
20753 Posts |
Quote:
Wow - this makes me wish I was more educated lol! Too bad I just like collecting coins and don't care about all these tax things. I second paying cash.
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I agree. Another reason why I do not ever want to sell my coins. So far in well over 60 years of collecting coins and other items, I too never sell anything I consider a collection. I collect for fun and selling such would be like selling a pet or a wife. Well a pet for sure. |
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Pillar of the Community
United States
3294 Posts |
If the government wants to start charging me on the $ I allegedly make on my hobby, I am going to simply add up all the expenses (including the unsold "inventory" in my collection), get a license as a business, show a huge loss and get a tax refund. If they want to treat this as income, then I get to write off the expenses.
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Replies: 21 / Views: 2,750 |
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Posted 03/24/2011 10:09 am
